The Latin American international investment and insurance marketplace is one of the fastest-growing in the world, with the demand for protection of assets amid volatile political and economic backdrops as necessary in 2020 as it ever was.
Across the Latin American region, the need for both products and advice is on the rise.
The inaugural International Investment Latin America Forum will look at where the industry is heading, the challenges and opportunities for the industry in the region, and how advisers, brokers and product providers are adapting to political and regulatory changes.The event will take place on Tuesday, 6th June , Miami.

The inaugural International Investment London Forum will look at where the industry is heading, the challenges and opportunities for the industry in the region, and how advisers, brokers and product providers are adapting to political and regulatory changes.The event will take place on Thursday, 30th April at the South Place Hotel, London.

The 21st International Investment Awards will take place on 8th October 2020, at One Whitehall Place, London. The II Awards are the longest-running event of their kind and last year saw a record number of categories and entries.

Spotting opportunities in Chinese local government bonds

Local government finance vehicles (LGFVs) issued in China are a burgeoning sector offering investors opportunities that are too good to miss – their complexity is a deterrent for many investors but this just creates more opportunities to identify value

LGFVs first came into existence in the 1990s but it was not until March 2014 that the first US dollar bond was issued. Today, the market capitalisation of LGFVs has surged to $15bn and they now account for 2% of the JPMorgan Asia Credit index (JACI) and 5% of the JACI Corporates sub-index.

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While many LGFVs are rated high-yield, they can receive between two to eight notches of credit uplift by rating agencies on the basis that they receive implicit support from local Chinese governments.

The sector should benefit from China’s increased reliance on infrastructure to support growth this year as the other main growth driver – property – appears to be waning from its cyclical peak in 2016 amid increased regulatory restrictions.

Market technicals are positive; at least half of new LGFV issuances are snapped up by onshore Chinese banks and asset management companies, making the sector less vulnerable to swings in international sentiment.

In identifying the most attractive bonds, NN IP favours issuers that have a good standalone credit profile, for example, an LGFV that might already have an investment-grade rating before taking into account any uplift from government support.

Secondly, NN IP likes LGFVs that are likely to receive support from the central government. In general, LGFVs from China’s provinces and municipalities take precedence over the capital cities, which are in turn more crucial than small cities and counties. LGFVs with assets that play a part in the national strategy are also more likely to be supported.

On-the-ground knowledge is essential to analyse the myriad factors that affect LGFVs. Investors must also keep ears to the ground to stay up to date on China’s strategic policies and regulations. One thing for sure is that China’s LGFV sector will continue to grow, bringing substantial opportunities to the alert investor.